From Sneakers to Cash Registers: How Visa and IBM Will Change the World of Payments

By Harriet Green, Global Head of Watson IoT, IBM

Take a look at your sneaker. That’s right, your sneaker. I mention it because it’s about to do much more than help you run. It’s going to make your life better, safer, healthier and more convenient and behind it all are Visa and IBM.

Consider this.

Knowing you’re busy, every week, the device understands your schedule and the weather and recommends the best time and place to get exercise. Now imagine you just got back from your daily run and the chip proactively sends an alert to your fitness tracker, letting you know how many miles you’ve logged in your current pair. In addition, knowing precisely when you traded in your last pair and why, it reminds you that it’s time to buy new sneakers and securely places the order for you from your favorite retailer using your preferred Visa card. It also knows where you are traveling for the next month and recommends some new running gear that is more appropriate for that climate.

These running shoes are just one example of an everyday object that can impact your daily life and behind it all are innovations in digital payments technologies and the Internet of Things (IoT).

Consider a household appliance such as your washing machine. Most of us never really know when these appliances need maintenance and we often forget to stock up on detergent until we’re already out. A connected washing machine understands you, how many loads of laundry you do every week and the cycles you tend to use and more. Now with this insight it could anticipate when you need to order more detergent to get the best possible price and then make a secure digital payment for you.

The same machine could also proactively alert you when servicing is needed and schedule an appointment with the local certified retailer before it’s too late, all through the push of a button.

According to Gartner, there will be 20.8 billion connect devices by 2020 and the potential to infuse payment capabilities into many of these items is very real.

For the consumer, it is all about bringing simplicity to our everyday lives through smart devices that understand and anticipate our needs. But simplicity must be accompanied with security because as the world shifts away from traditional payment models, consumer data needs to be safe in order for new models to succeed. And by using new security methods such as tokens, these transactions, regardless of where they take place, are more secure than ever.

But this isn’t just a consumer story. For businesses, this point-of-sale model opens up doors to something critical—new ways to increase customer loyalty and business models that plug into previously untapped revenue streams. Let’s go back to our washing machine example, shall we?

Traditionally a retailer sells you a washing machine or a refrigerator and that’s it. It’s a onetime payment that ends once it’s hooked up in your home. But it doesn’t have to be that way. Now by putting these point-of-the-sale and IoT capabilities into the unit, what’s convenient for you, the consumer, is a continued revenue stream for the retailer and it lasts for the lifetime of the unit. In fact, it seeds a greater level of loyalty that will likely help ensure you buy from them again in the future.

This benefit even extends further. Consider those businesses that are named the preferred detergent provider for your model. Now instead of fighting to garner the attention of shoppers in the store, this new point-of-purchase model has brought you front and center with the consumers in their home.

The integration of digital payment systems with IoT devices and token services is a major step that will bring innumerable benefits to our everyday lives by enabling things we could have never imagined and making it easy to do something as simple as buying detergent or gallon of milk.

How Things pay for things

By the year 2020, the Internet of Things (IoT) will consist of more than 20.8 billion devices. Each device is a potential way to pay, and Visa is enabling new payment opportunities with security in mind.